Covid-19 Vaccine: Why We Should Bow to Capitalism Right Now
Capitalism has a very bad reputation in Germany. In this regard, little has changed since Karl Marx was alive. While, in the past, critics of capitalism attributed the exploitation and alienation of the workers to it, they now blame the unfair distribution of income and opportunities on capitalism.
Quite often, the pharmaceutical industry is particularly frowned upon in the view of many contemporary critics. It is regarded as a radically globalized industry dominated by a few large corporations; these make huge profits with drugs on markets that they monopolistically shield from competition through cunning policies on research, patent, licensing and pricing -much to the disadvantage of patients in poorer countries of the world who cannot afford these drugs.
Such assumptions may be justified in some instances. On the flipside, however, this industry has an extraordinary innovative power, which can be witnessed today in the race for a vaccine against Covid-19. It is only nine months ago that it became clear that we are all facing the beginning of a dangerous pandemic. Back in March 2020, it was as if someone blew the whistle to start the race for a vaccine. This immediately caused some commercial consortia to feverishly start their research – of course, this eagerness was not primarily driven by altruism and charity, but by the prospect of large profits, should the search be successful. Practically all the big names in the pharmaceutical industry got started, usually in close cooperation with small biotechnology companies in highly specialized medical markets.
Lo and behold: just three quarters of a year later, one of these consortia - the American "giant" Pfizer (90,000 employees) and the German "dwarf" Biontech (1,300 employees) - report a breakthrough that can be considered viable and promising by all indications. Pfizer contributes the testing and sales capacities, while Biontech adds its innovative knowledge. And from what we hear, other consortia are very close to follow with similar announcements in the coming weeks and months. It is not unlikely that a double-digit number of vaccines will eventually be available in the not too distant future. A blessing, both for medicine and humanity!
So, is all that just luck and coincidence? Of course not. Like a magnifying glass, the race for a vaccine shows how global capitalism works in a concrete example and a particularly dramatic case: an urgent demand is identified, cooperation between corporations is launched, research is concentrated within the company, skilled workers in the laboratories are activated - and the probability of a breakthrough somewhere in the capitalist world rises sharply. It is similar to a sporting competition, even if it involves much more money and, in the case of Covid-19, historic fame. Of course, if you look closely, the prospect of state funding may also play a role, but it pales in comparison to the incentives that the market offers.
In short: capitalism works. And this is especially true in the most innovative parts of our global economy, which has an incredibly broad and deep infrastructure, that is able to mitigate and overcome any unforeseen shortages. One should actually shout out: "Chapeau! Long live competition in the spirit of Joseph Alois Schumpeter!
But don't worry, dear critics of capitalism, that will not happen. People will soon be outraged by the steeply rising profits in the accounts of the successful pioneer companies. And, just as quickly, we will hear complaints about the problems of contracts and the distribution of vaccines, both commercially and politically.
But before this starts, perhaps a brief respectful bow would be appropriate: in honor of global capitalism.
This article was first published on November 12th in the Wirtschaftswoche.